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Consider the following goods. State whether a consumer's purchase and use (or a producer's manufacturing) of each good creates an external cost, external benefit, or neither. Would you recommend taxing or subsidizing any of these activities? If so, why? If not, why not? 1. Smoking Cigarettes

Consider the following goods. State whether a consumer's purchase and use (or a producer's manufacturing) of each good creates an external cost, external benefit, or neither. Would you recommend taxing or subsidizing any of these activities? If so, why? If not, why not? 1. Smoking Cigarettes

Economics: Private and Public Choice (MindTap Course List)
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter5: Difficult Cases For The Market And The Role Of Government
Section: Chapter Questions
Problem 5CQ
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Please only solve these following ones if it is hard to explain the reasons.  

1) External cost, external benefit or neither?
2) Recommend Taxing or Subsidizing?

Consider the following goods. State whether a consumer's purchase and use (or a producer's manufacturing) of each good creates an external cost, external benefit, or neither. Would you recommend taxing or subsidizing any of these activities? If so, why? If not, why not? 1. Smoking Cigarettes 2. Buying a New Car 3. New Ideas / Education 4. COVID-19 Vaccines 5. Producing Electricity
Transcribed Image Text:Consider the following goods. State whether a consumer's purchase and use (or a producer's manufacturing) of each good creates an external cost, external benefit, or neither. Would you recommend taxing or subsidizing any of these activities? If so, why? If not, why not? 1. Smoking Cigarettes 2. Buying a New Car 3. New Ideas / Education 4. COVID-19 Vaccines 5. Producing Electricity
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